Cloud and hosting
Cloud and hosting spend divides between the service and its implementation. Running inference and paying for capacity are service costs, expensed as incurred. Under ASU 2018-15, qualifying implementation costs of a cloud arrangement that is a service contract may be capitalised on the internal-use software model and expensed over the contract term.
Routing by framework
A hosted arrangement that conveys only a service is expensed. Configuration and customisation of a SaaS arrangement are generally expensed under IFRS unless a separate intangible asset is identified.
For a cloud arrangement that is a service contract, ASU 2018-15 allows implementation costs to be capitalised on the same model as internal-use software and expensed over the term.
The first question is whether the arrangement conveys a software licence the entity controls or only a service. Most managed hosting and inference is a service contractASU 2018-15350-40-15.
Implementation costs under US GAAP
ASU 2018-15 aligns implementation-cost accounting for a service-contract cloud arrangement with ASC 350-40. Configuration and integration work in the application-development phase of implementation may be capitalised and amortised over the arrangement term; the recurring service fees are expensedASC 350-40350-40-25.
An entity adopts a hosted inference platform under a service contract. The monthly usage fees are expensed. The one-off cost to configure and integrate the platform into internal systems is capitalised under ASU 2018-15 and amortised over the contract term including reasonably certain renewals. All figures are illustrative.
- S4FASB Accounting Standards Codification, PwC Viewpoint (US GAAP). https://viewpoint.pwc.com/dt/us/en/fasb/GAAP/Codification/Codification/228073.html
- S5ASU 2025-06 on internal-use software costs, BDO (US GAAP). https://arch.bdo.com/new-asu-on-internal-use-software-costs-guidance